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⚖️ '''Adjudication''' in the insurance context refers to the formal process of evaluating and deciding on a [[Definition:Insurance claim | claim]] or dispute, resulting in a binding determination of whether coverage applies, what amount is payable, or how a contested matter should be resolved. While the term has broad legal meaning, within insurance it most commonly describes two activities: the internal review of claims by an [[Definition:Insurance carrier | insurer's]] claims department and the external resolution of coverage disputes through regulatory, arbitral, or judicial proceedings.

🔍 Inside a carrier's operations, adjudication follows a structured workflow. After a claim is filed and initially reviewed by a [[Definition:Claims adjuster | claims adjuster]], it moves through verification, documentation, and coverage analysis before a decision is rendered to pay, partially pay, or deny. Many insurers now automate portions of this process using [[Definition:Artificial intelligence (AI) | AI]]-driven [[Definition:Claims management | claims management]] platforms that apply policy rules to structured data, flagging complex cases for human review. In [[Definition:Health insurance | health insurance]], adjudication is especially prominent — every medical claim passes through an adjudication engine that checks procedure codes against the insured's benefit plan, applies [[Definition:Deductible | deductibles]] and [[Definition:Copayment | copayments]], and calculates the reimbursable amount, often within seconds.

📋 When internal adjudication leads to a denied or disputed claim, the matter may escalate to external adjudication through an [[Definition:Administrative hearing | administrative hearing]], [[Definition:Arbitration | arbitration]] panel, or court proceeding. The efficiency and fairness of adjudication directly shapes an insurer's [[Definition:Loss ratio (L/R) | loss ratio]], regulatory standing, and customer trust. Carriers that invest in transparent, well-documented adjudication processes reduce the risk of [[Definition:Bad faith | bad faith]] litigation and strengthen relationships with both [[Definition:Policyholder | policyholders]] and [[Definition:Insurance regulator | regulators]].

'''Related concepts:'''
{{Div col|colwidth=20em}}
* [[Definition:Claims management]]
* [[Definition:Claims adjuster]]
* [[Definition:Arbitration]]
* [[Definition:Administrative hearing]]
* [[Definition:Bad faith]]
* [[Definition:Subrogation]]
{{Div col end}}

Definition:Adjudication - Revision history

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